New car sales have been declining year-on-year for the past eight years, according to J.S. Johnson Senior Manager Charles Johnson, who said insurance companies have been taking a hit on the comprehensive premiums side.
Johnson, speaking to the media on Friday at a press conference for the Royal Fidelity Bahamas Economic Outlook, said Bahamians have been importing more and more used cars, and more frequently from Japan. Those cars are typically found to not be eligible for comprehensive insurance.
"It has adversely affected our premium growth on the comprehensive side of things," he said.
"Of course, correspondently, we have seen an increase in the importation of the second-hand car - Japanese model cars."
Johnson lamented that underwriters are therefore doing the same amount of work for lower premiums.
New car sales
professionals in The Bahamas have continually complained about the slowdown in new model vehicle sales and government taxes that may have had an adverse effect on the industry.
Johnson said while the second-hand vehicles may be many, they do not demand the kinds of premiums that vehicles that qualify for comprehensive insurance do.
"We have had some concerns with the Japanese model vehicles because of the availability of parts, but of course they have been getting very good at it and I think with technology you can get a part here very quickly," said Johnson.
While a worrisome trend for insurance providers' bottom line, there is nothing much the insurance companies can do about the decline in comprehensive-worthy vehicles.

Click here to read more at The Nassau Guardian